From August 1, Israel’s citizens are restricted from transacting with businesses using more than 6000 Shekels ($1,760) in cash. This limit is higher at 15,000 Shekels ($4,400) for transactions between private individuals. The goal of this new law is to encourage the use of digital payments and curb black money from the economy. Israel’s tax authority is of the opinion that cash is the primary fuel for underground money. So, Israel imposes limits on the usage of cash.
The new law in Israel
Israel had similar rules in place even before this, but at the time, the limits were higher at 11,000 Shekels for transactions with businesses and 50,000 Shekels for transactions between private individuals. However, now it has been reduced to a huge extent to 6,000 and 15,000 Shekels respectively.
One of the officials of Israel’s Tax Authority said that they want to limit the use of cash in the economy. This will make it harder for criminals to carry out illegal activities as they often rely on hard cash more than anything.
It also shows that Israel realizes that cash is the main problem when we talk about illegal activities. Still, politicians and many authorities make it look like crypto is the main culprit behind all wrong activities.
Exceptions to Israel’s new law
Citizens can donate cash to charities without any limits and also do business with Palestinians who are not Israeli citizens. However, when there is a large sum of cash involved, a detailed report regarding the transaction needs to be submitted to the Terror Financing Prohibition Authority and Israel Money Laundering authority. These exceptions are bound to change in the future.
The problem with cash
Unlike digital transactions, cash cannot be traced that easily. There are hardly any trails left behind, and the only chance authorities have to catch the criminals is when the exchange of money happens. Yes, there are raids, and loads of money are found, but those are the rarer cases. In most cases, transactions go under the radar. So, pushing digital transactions in today’s world is a wise decision.
What are your thoughts on Israel as it imposes limits on the usage of cash? And do you think other major countries could also do this in order to curb illegal activities? Let us know in the comments below. And, if you found our content informative, do like and share with your friends.